Private Equity Track

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1 2 7 T H S T J U N E J u n e W e e k l y u p d a t e o n t h e I n d i a n P E S e c t o r PE Activity for the week The year 2013 has so far aggregated $3.66 bn of PE investments across 184deals compared to $3.35bn (213 deals) during the same period last year. During the week ended 1 st June, 2013, there were 10 PE/VC deals worth $97.1 mn compared to 13 deals worth $8.8mn in the previous week. The largest deal during the week was by India Infoline s realty fund, a $62mn investment in Wadhwa group s real-estate project in Mumbai YTD 2011 YTD 2012 YTD 2013 PE Investments ($mn) No. of Deals YTD: Year to date (from Jan 01 to 01 June) PE Deals During The week Investor (s) India Infoline Realty Fund Target Wadhwa Group's Mumbai Project Stak e (%) Value ($mn) Stage Sector Industry Segment NA 62 Early Construction Real Estate Real Estate Cartica Capital TTK Presitge Growth Manufacturi ng Undisclosed investor Inventus Capital, Mumbai Angels Navam Capital, Aarin Capital Excellence4u Technology Consumer Durables NA 10 Early Services Misc. services edreamsedusoft NA 2 Early Services Education Invictus Oncology NA 1.87 Early Manufacturi ng Chemical & Allied IFC, Others Ecolibrium Energy NA 1.6 Early Services Misc. services Kima Ventures, AKM Systems, One97 and angel investors Rajan Anandan, Blume Ventures Nexus Venture Partners Kitchen Appliances Recruitment firm Education Technology Pharmaceutic als Power Management Edukart NA 0.5 Early Services Education E-Learning Socialblood NA NA Early Services IT Internet Services Unicommerce NA NA Early Services ITeS Software Blume Ventures Bedbathmore.com NA NA Early Services Retail Internet retail Source: Four-S PE Database Research4India is the research services arm of Four-S Services Pvt Ltd. Here we provide regular research reports on key sectors of the Indian economy, and large unlisted companies in these sectors.for subscription / custom queries, please contact SeemaShukla at seema@four-s.com.

2 India Infoline s realty fund invests in Wadhwa Group Project IIFL Real Estate Fund, the dedicated realty fund of India Infoline, is set to invest close to Rs 3.5 bn ($62mn) in Mumbai-based developer Wadhwa Group s Chembur project. The investment size is much bigger than the average ticket size of deals done by the fund; transaction is structured with multiple tranches. Wadhwa Group is one of the biggest real-estate players in Mumbai. The group has been present in commercial, hospitality and residential projects for over 45 years. Cartica Capital to invest in TTK Prestige TTK Prestige Ltd is raising Rs 1.06bn ($19 million) from Cartica Capital through a preferential allotment, as per a stock market disclosure. The deal involves allotment of 3,00,000 equity shares at a premium of Rs 3,540 per share. This will represent around 2.6% in the diluted capital of the public-listed firm. A part of the TTK Group which has interests in contraceptives, baby care and other products, TTK Prestige is one of the top small kitchen appliances firms in the country. For FY13, the company clocked revenues of Rs 13.5 bn and net profit of Rs 1.33 bn. Mauritius-domiciled Cartica Capital is also an investor in another public-listed firm Mahindra & Mahindra Financial Services. Recruitment services firm Excellence4u raises $10M from Swiss investor Bangalore-based recruitment firm Excellence4u Technology Assessments Pvt Ltd has raised $10 million from a Swiss family in its first round of institutional funding. The funds will be utilized to expand the geographical presence of the company as well to intensify the marketing efforts. Inventus Capital, Mumbai Angels Invest In edreamsedusoft Inventus Capital Partners along with existing investor Mumbai angels has invested $2 Mn in edreamsedusoft, an education technology company in Bangalore. This year in January, edreams Software raised Rs 50mn from Mumbai Angels. Founded in 2010 by Rajeev Pathak, edreams provides educational software products. Its flagship offering, Funtoot, is a personalized tutor that teaches children in a fun and interactive manner. Currently, 1000 students across three schools use Funtoot. The company plans to use funds to expand its presence further in the southern India as well as to develop its existing product offering. Invictus Oncology Gets Series A Funding From Navam Capital, Others Delhi-based Invictus Oncology Pvt Ltd has raised Rs 105mn (around $1.88mn) in Series A funding led by Navam Capital and Aarin Capital in which an unnamed angel group also participated. The company will deploy the money to push development of platinum chemotherapies used in the treatment of different types of cancer, including lung, testicular, colorectal and childhood cancers. Founded by Shiladitya Sengupta, Invictus is developing chemotherapy models that it says will be more effective and less toxic than the treatment now available Navam Capital is a venture capital firm focused on seed and early-stage investments in energy, technology and healthcare. Aarin Capital invests in healthcare, life sciences and technology based products and services business pursuing large market opportunities. Ecolibrium secures $1.6M from IFC, others Ahmedabad-based energy management solution company, Ecolibrium Energy Pvt Ltd, has received $1.6mn from Infuse Ventures and International Finance Corporation (IFC). IFC, through its recently-created Cleantech Innovation Facility, put in $1 million, while the remaining $0.6 million came from Infuse. This is Infuse s debut investment. Founded in 2008 by siblings Harit and Chintan Soni, Ecolibrium provides a technology platform Research4India 2

3 to monitor and control electricity usage for commercial and industrial customers. The firm was incubated at IIM-Ahmedabad s business incubator - Centre for Innovation, Incubation and Entrepreneurship (CIIE) and was operational in August Ecolibrium develops smart grid technologies and implements business models to increase the installation of grid-connected solar systems. The firm is working with electricity utility companies and private housing complexes. Its focus areas include smart grid, distributed renewable generation, wireless energy monitoring and tracking. Ecolibrium has several paying customers and operational pilots across the country, including the Ministry of New and Renewable Energy (MNRE), Torrent Power, Fiat and Mitsui. Edukart Gets Seed funding from Kima ventures, others Edukart, an online education startup, has raised $500,000 in seed funding from Kima Ventures, AKM Systems, One97 and angel investors. The funds raised will be used to accelerate growth plans, launch new courses in partnership with both Indian and international institutions, and strengthen its franchisee network. Founded in 2011 by Ishan Gupta and Mayank Gupta, Edukart is an online education company based in Delhi. The company offers both short certification courses and degree programmes for which it has partnered with institutions such as the London School of Business & Finance, Indian and Mobile Association of India, Mahatma Gandhi University and Retailers Association in India. It currently has a team of 25 people and 40 franchise partners across the country. Blume Ventures, others, invest in Social Blood Bangalore-based Socialblood, a social network that connects blood donors, has raised an undisclosed amount from multiple investors. These investors include Google India MD Rajan Anandan, Karthik Reddy of Blume Ventures, and Ravi Gururaj and Ramesh Shah of Harvard Business School Alumni Angels. Founded by Karthik Naralasetty in 2011, Socialblood is a social network that connects blood donors and recipients of the same blood type through Facebook. Other than Socialblood, there are Tweet4blood, Indianblooddonors.com which provide the same service. Tweet4blood is a venture started by Thejesh GN started in 2009, one can tweet your blood requirement without logging in. Indianblooddonors.com connects blood donors through SMS, IVR, Android app, and call. Order management startup Unicommerce gets funding from Nexus Ventures New Delhi-based Unicommerce esolutions Pvt. Ltd. India, which provides a SaaS-based order management and fulfilment platform to ecommerce and retail businesses, has received an undisclosed funding from Nexus Venture Partners. The funding will be used to support aggressive marketing and sales efforts. Continuous product development and service support is another area where the company intends to utilise the proceeds. Uniware is Unicommerce s SaaS based order management and fulfilment platform with features to manage procurement, inventory, order fulfilment, shipping and returns. The company claims that it charges its clients based on usage. The company was founded in 2012 by three classmates from IIT Delhi. Bedbathmore.com raises Series A funding from Blume Ventures Online home furnishing portal Bedbathmore.com has raised an undisclosed amount in series A funding from Blume Ventures. The promoters of the company Encompass Design India Pvt Ltd, has also put in some money to the venture and the company plans to use the funds raised in building private labels and hiring category leaders in next months. Bedbathmore provides home furnishing products across various categories such as Bed, Bath, Kitchenware, among others. Research4India 3

4 Fund Raising & Liquidity Events Warburg Pincus exits Havells India Warburg Pincus through its investment arms - Woodcrest Investment sold its 3.69% stake ( share) in Havells India on the BSE, Seacrest Investment sold 4.66% stake ( shares) on the NSE at Rs 700, aggregating to Rs7.3bn. Earlier in February, Warburg Pincus had sold 5.6 per cent stake in Havells India for Rs 4.5 bn. After the latest stake sale, the PE fund exits completely from the electronic goods maker. Noida-based Havells India is an electrical and power distribution equipment manufacturer. Its business is divided into four verticals - cables and wires, lighting and fixtures, electrical consumer durables (fans) and switchgears. The company has 10 manufacturing facilities in India in various locations, including Himachal Pradesh, Uttar Pradesh and Rajasthan. Havells India also has seven overseas manufacturing plants in Europe, Middle East and Latin American regions. It owns brands such as Crabtree, Sylvania, Concord, Luminance, Linolite and SLI Lighting. India Infoline group eyes up to $ 125 mn for new realty fund India Infoline (IIFL) group is looking to raise a new domestic realty fund with a corpus size of Rs 5-7bn ($90-125mn). Recently the group has invested close to a billion rupees in a proposed residential project in Ghaziabad being developed by Shipra Group. Capital from PE funds has been a lifeline for real estate developers, which have used it for land payments, project construction and obtaining mandatory approvals, as loans from banks have dried up. The new funds will be raised from domestic investors and are likely to focus on investing in office and residential projects. Private Equity News HRH Group Of Hotels Plans To Raise Funds For Expansion HRH Group of Hotels, which runs chain of heritage hotel in Udaipur, is looking for foreign funds for expansion. The group plans to invest the funds raised to enlarge existing hotels, leasing hotel units or vacant lands from other member companies and acquiring fresh properties. The company plans to open at least two new art galleries in the next financial year such as sculpture, costumes and invest Rs2.5bn to upkeep of its heritage properties which will be funded through internal accruals. Founded in 1559, Historic Resort Hotels (HRH) is a chain of heritage palace-hotels and resorts under private ownership. The group offers regal experiences in island-palaces, museums, galleries, car collections, and much more. Currently, the group operates 10 properties, including hotels and resorts with around 600 rooms across the states. Mantri Developers Plans To Raise Funds Through PE Route Mantri Developers is planning to raise PE investment and has started discussions with Morgan Stanley. The company plans to use the funds for its projects. In 2006, Morgan Stanley had invested $68 Mn for 17.68% stake in the company. Incorporated in 1999, Mantri Developers is the flagship company of the Mantri Group. Sushil Mantri holds 74.29% along with Malpani family holding 8.25% of the total shareholding in the company. At present, Mantri has 6.75 msf space under development through five projects in residential and three projects in commercial segments The company has another 5.26 msf of upcoming residential development in the short term. Earlier in 2010, the Bangalore based developer raised $89 Mn from Xander group in two mixeduse projects in Bangalore and Chennai. Last year, ASK Property Investment Advisors Research4India 4

5 acquired a majority stake for Rs1bn in a project at Bangalore undertaken by Mantri Developers. Financial Technologies Plans To Reduce Stake In IEX Financial Technologies is in talks with PE investors to sell 6% stake in Indian Energy Exchange to pare its stake down to 25% in order to comply with electricity regulator - Central Electricity Regulatory Commission. As per the regulatory requirements, promoters of energy exchanges should own no more than 25% and trading members no more than 5%. IEX, India's first power trading exchange, was originally promoted by FT and co-promoted by PTC. IEX facilitates day-ahead and weekly spot trades in electricity. Around 29 states and Union territories, 150 private generators and over 100 industrial consumers are managing their energy portfolio on the power bourse. Compared to its peers, Power Exchange India and National Power Exchange, IEX has more than 80% market share. More than 22 Bn units of electricity were traded on the IEX in compared with 13 Bn units a year ago. IL&FS, Kotak PE Plans To Exit BFW IL&FS and Kotak PE is planning to exit its investment in Bharat Fritz Werner, a Bangalore based machine tool builder. The PE investors are eyeing a valuation of around $ MN and are currently in talks with investors in Asia and Europe for stake sale. Bharat Fritz Werner is a part of the Kothari Group. It was setup in 1961 with German techno commercial collaboration. BFW manufactures conventional milling machines in the country and its products cater to aerospace, automobile, defence, forging and pharmaceutical segments. In 2011, it acquired majority stake in Germany based machine tool manufacturer Matec Machunenbau GmBH. The company has customers in Italy, Germany, France, Netherlands, Oman, Russia, Sri Lanka, Saudi Arabia, UAE and Thailand and it counts carmakers - Honda Motors, Maruti Suzuki, Kirloskar Toyota and auto component-maker Bosch among its clients. Kotak PE along with IL&FS invested Rs250 mn in BFW in 2005, which was utilized for expansion of its facilities, setting up an Export Oriented Unit at Bangalore and to penetrate European and American markets. Snap Fitness To Raise Funds US-based fitness chain Snap Fitness s Indian arm - Snap Fitness India is in plans to raise $10 Mn to fund its expansion in the country. The fitness company has approached PWC to manage the fund raising exercise and plans to close the deal within the next one year. Launched in the year 2008 in India, SNAP fitness has been on an expansion spree. As of 2012, it had successfully launched 31 clubs in India covering the major cities of Bangalore, Chennai, Hyderabad & Mumbai and it plans to have 300 clubs across the country by Snap Fitness centres, in sizes of 3,000 sqft, 4,000 sqft and 5,000 sqft, typically entail an investment of between Rs 12 mn and Rs 15 mn each. It plans to use the funds to meet its mandate of opening 300 centres company owned and 200 franchisee operated in the next five years, including 10 each in Hyderabad and Chennai. This year the company was looking at opening 40 centres pan-india. IPO, other offerings Aban Offshore Plans To Raise Funds Through Multiple Routes Aban Offshore plans to raise Rs2.5 bn through issue of securities to QIB. The company also has plans to raise Rs2.2bn through issue of FCCBs, GDRs, ADRs etc. Germany's DVB Bank was in advanced talks with Mauritius-based PE fund India Star to buy its 29% stake in Global offshore for around Rs1bn. Aban Offshore provides drilling and oil field services for the offshore exploration and production of hydrocarbons to the oil industry in India and internationally. Aban Offshore is also engaged in wind and thermal power generation business. Research4India 5

6 M&A Activity for the Week During the week ended 1June, 2013, there were 9 M&A deals(size of 6 deals were not disclosed) worth $150mn. Acquiror Target Business Stake(%) Deal Value($ mn) Healthcare Global BACC Healthcare Services NA NA Cigniti Tech Gallops Group Cos Software & Services 100 NA Concert Care Novel Infosolutions Software & Services 100 NA Sumitomo Rubber Apollo Tyres South Africa Tyres Walmart Cedar Support Service Retail Snapdeal Shopo.in Retail 100 NA Concert Care Novel Infosolutions Services 100 NA TVS Logistics Wainwright Industries Logistics BluestarInfotech Activecubes Business Intelligence NA NA Research4India 6

7 Market Update Key Domestic Indices Indian Market Movements 52 Week Index 24-May May-13 Change (%) High Low BSE Sensex % S&P CNX Nifty % CNX Nifty Junior % Nifty Mid Cap % CNX IT % Bank Nifty % CNX Infrastructure % CNX Realty % Key Global Indices Global Market Movements 52 Week Index 24-May May-13 Change (%) High Low NASDAQ % DJIA % S & P % NIKKEI % Hang Seng % Straits Timex Index % FTSE % Source: Google Finance, Yahoo finance Research4India 7

8 Four-S Services Pvt Ltd A Catalyst for Success Founded in 2002, Four-S has a strong & successful track record of genuine, accurate and objective advice to top Indian & global companies & PE Firms. Four-S has already proven success in corporate finance, strategy consulting, fund-raising, investment banking and investor relations mandates with 100+ corporates and large PE funds. Four-S, trusted advisor to top Indian & Global Cos Offering comprehensive bouquet of services to SMEs, Corporates and PE Funds Sector Research Target Identification Portfolio Benchmarking Post- Investment Review Investor Relations Investment Banking Entry Strategy Independent Valuation Research4India 8

9 About Research4India Research4India is the research services arm of Four-S Services Pvt Ltd. Here we provide regular research reports on key sectors of the Indian economy, and large unlisted companies in these sectors. These reports are available on our research site as well as from leading international research sellers like Thomson Reuters, Bloomberg, Research and Markets, CapitalIQ etc. Disclaimer The information contained herein has been obtained from sources believed to be reliable but is not necessarily complete and its accuracy cannot be guaranteed. No representation, warranty, guarantee or undertaking, express or implied, is made as to the fairness, accuracy or completeness of any information, projections or opinions contained in this document or upon which any such projections or opinions have been based. Four-S Services Pvt. Ltd. will not accept any liability whatsoever, with respect to the use of this document or its contents. This document has been distributed for information purposes only and does not constitute or form part of any offer or solicitation of any offer to buy or sell any securities. This document shall not form the basis of and should not be relied upon in connection with any contract or commitment whatsoever. This document is not to be reported or copied or made available to others. The company may from time to time solicit from, or perform consulting or other services for, any company mentioned in this document. For further details/clarifications please contact: Seema Shukla Gurgaon Office: 214, UdyogVihar, Phase I, Gurgaon Tel: Ajay Jindal Mumbai Office: 501, A C Market, Tardeo Mumbai Tel: Research4India 9